Industry leaders testify on issues concerning project oversight

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American Assocation of State Highway & Transportation Officials Vice President Tom Stephens, Federal Highway Administrator Mary Peters and U.S. DOT Inspector General Ken Mead testified before the House Appropriations Subcommittee on Treasury, Transportation and Independent Agencies on issues in project oversight.

Subcommittee Chairman Ernest Istook (R-Okla.) noted in his opening statement that it is not realistic to expect a gasoline tax increase, so he said the focus needs to be on "improving the way we do business." Istook said he was interested in how to get more value from every transportation dollar, and that lean economic times sharpen the differences between "needs that must be met and wants that must be deferred."

Peters focused on FHWA's efforts to evaluate cost-estimating practices on a national basis, an emphasis on providing oversight without negatively affecting the state and local officials' ability to deliver projects, and the need for the FHWA workforce to be multidisciplinary for effective project oversight.

Mead presented several proposed "action areas" to improve project oversight including developing reliable project cost estimates that include inflation factors. He said cost estimates are sometimes released too early, before all relevant factors are included.

Mead also recommended project finance plans for all projects of $100 million or more. Fuel tax evasion needs further attention, he said, and there needs to be continuous vigilance against other forms of possible fraud.

Stephens said "even a few instances of fraud can undermine the credibility of the whole program," though he noted that fraud is only found in a very few projects. State DOTs are "working to improve early cost estimates."